ER and BoP Flashcards
(3 cards)
1
Q
What are Freely floating exchange rates?
A
The value of one currency expressed in terms of another, whose value is determined by the demand and supply of the currency
2
Q
What is Government intervention (in exchange rates)?
A
Intervention of the Central Bank to manage the exchange rates
3
Q
What is the Balance of Payments?
A
Record of all transactions between residents of the country and the residents of all other countries. In a given year, total inflows (credits) must equal total outflows (debits)
